Bank Australia Package Premium Loan

Features

Once you pay the annual package fee of $350, Bank Australia’s Premium variable and fixed home loans offer real benefits to owner-occupier borrowers. The package is available for investment purpose only for existing customers.

Borrowers can redraw any additional repayments made on variable principal and interest loans for no fee, and there is no penalty for early payout. You can make monthly, weekly or fortnightly repayments. Bank Australia also offers interest only repayments on variable loans.

You can also take advantage of the free 100 per cent offset facility whereby your savings will work to offset your home loan principal and help you to reduce interest costs on your loan.

The Premium Package variable rates are very competitive and you get a bigger discount by borrowing more. Bank Australia offers owner-occupiers interest rate discounts of up to 1.0 per cent on loans $700,000 or more. Loans between $100,000 and $400,000 get an 80 basis point discount and those between $400,000 and $700,000 get a 90 basis point discount, with smaller discounts offered to investors.

The loan is available to owner occupiers who have a five per cent deposit or available equity, although a 20 per cent deposit or more will mean you don’t have to pay for lenders mortgage insurance. Investors need a deposit of at least 20 per cent.

The package includes a credit card with a 12-month interest free period and there is no annual fee.

The loan is portable so if you buy a new home, you can take your loan with you. The package includes the option to pause your repayments, as long as you’ve had the loan for at least 12 months and your borrowings are currently less than 90 per cent of the property’s value.

Additional benefits include a 10 per cent discount on general insurance policies and a free initial appointment with a financial planner. You can also apply for loan top-ups and personal loans without having to pay any establishment fee.

It is also possible to use the interest only feature of this loan on a construction loan for 12 months, with free progress inspections. There is, however, no redraw facility available on interest-only loans.

There are also some attractive features offered on fixed loan under the Package Home Loan Premium, including a redraw facility. You can make additional repayments up to a certain allowed amount per year whilst fixed and no fee applies.

A flat interest rate discount of 0.15 per cent is offered on fixed loans for investors and owner-occupiers and the maximum term for which you can fix your rate is five years.

Who is the Bank Australia Package Premium Loan good for?

The Premium Package Loan is ideal if you are looking for a loan with a moderately low interest rate and you’re keen to keep all your banking products in one place.

While the annual package fee is a little high, it’s in line with package fees charged by the big banks. There are other savings to be made in terms of fee waivers. By offering free repayments and redraw facilities on both fixed and variable versions of this loan, Bank Australia delivers flexibility for home owners on a budget or those with spare cash.

Review - What RateCity says

If you’re an owner-occupier looking for a package with a relatively low interest rate, and like the idea of being more than an account number, Bank Australia’s Package Premium Loan may be a good option for you. If you already pay a high credit card annual fee and monthly fee for a transaction account, this loan package may be a viable option as it allows you to reduce fee payments which could work in your favour. You can also keep interests costs down on your loan by repaying extra or using the offset account.

In addition, if you are borrowing larger amounts, the variable interest rate discounts can also be substantial. But if you’re on a tight budget and simply want the lowest cost home loan, then this may not be the most economic option given the ongoing annual package and splitting fees.

3.82%

4.17%

Pros

Cons

Moderately high annual package fee.

Early payout penalties for fixed rate loans.

Repayment pause facility may add to the term and cost of your loan.

Eligibility

Minimum borrowing of $100,000. Owner-occupiers must have five per cent deposit or equivalent security (20 per cent if you wish to avoid paying mortgage insurance). Investors must have at least 20 per cent deposit or equivalent security available. Pay annual package fee as and when it falls due.

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Suitable For

First Home Buyers

Owner-Occupiers

Refinancers

Investors

Fees

Estimated upfront fees: $0 - $595

Discharge fees: $250

Ongoing fees: $350 annually

Bank Australia charges an annual fee of $350 on its Premium Home Loan Package, in line with that charged by the big banks for their package deals. Once paid, however, there are no monthly account keeping fees and you get a free offset account and credit card.

However, there are fees attached to the portability of the loan, which are much lower for existing Bank Australia customers than for new borrowers. Splitting between loan products will also attract fees, so factor this in to your affordability calculations.

Bank Australia will charge you early payout penalties if you pay off a fixed loan before the term expires, though this is standard practice among home lenders. There are also fees attached to switching between loan products so consider this carefully if you wish to split your loan.

Features

Redraw facility

100% offset account

Unlimited extra repayments

Weekly repayments

Fortnightly repayments

Monthly repayments

Loan allows split interest rate

About Bank Australia

Bank Australia is Australia’s first fully customer-owned bank. There are only 24 branches in the country but the RediATM network ensures access to over 3,000 machines. You can also do your banking online or over the phone.

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